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Where Five Magazines Are Finding Revenue

With Print Advertising Looking Less Likely to Rebound After Recession, These Titles Are Taking Advantage of Other Opportunities

NEW YORK (AdAge.com) -- It wasn't so long ago that almost every magazine chased ever larger circulation, even if it meant losing money in the process. It worked because print-ad sales paid the bills -- and then some.

Now that magazines seem unlikely to recapture the print-ad revenue they enjoyed before this recession, however, their other revenue sources are taking on new importance. Happily for the industry, it's getting easier to find publishers that have built or begun real businesses beyond selling ad pages. Unhappily, however, it's still not easy.

Ad Age surveyed five magazine brands, big and small, whose revenue mixes suggest models that may become much more common.

MEN'S HEALTH

"Print advertising in the main book is still so incredibly important to our overall mix," said Jack Essig, Men's Health senior VP-publisher, whose print edition guarantees a massive circulation of 1.8 million. "But we're fortunate that we were, even before the recession, a brand with other places to tap."

Those places have long included bookstore aisles, where Men's Health has most recently been selling "Eat This, Not That" books. The recession's effect on ad pages has been painful, of course, but also illuminating.

"If anything, it's taught us that we have some real businesses here," Mr. Essig said. "During the recession we've had huge success with 'Eat This, Not That.' And it's been hugely profitable for the company."

The pressure on traditional fronts has also increased the focus on new approaches that could grow quickly, such as an iPhone app that lets users buy additional content directly and the Men's Health Personal Trainer subscription site. "With these subscription sites, we've been forced to get more innovative about how far we can grow this brand," Mr. Essig said. "The thing we've learned most is the importance of diversifying."

MAKE

Make magazine, O'Reilly Media's quarterly for techie do-it-yourselfers, is profitable because of its circulation pricing, said Fran Reilly, consulting publisher at Make Media. The print edition, which has paid circulation of 125,000, is $14.95 for single copies and $34.95 for a year's subscription.

Make plans to put more effort into selling national advertising, which wasn't a priority at first, starting next year. But it's already built plenty of other avenues for revenue. Last May's two-day Maker Faire attracted 78,000, up 20% from a year earlier, at a base price of $25 for one day. E-commerce contributes more than a quarter of the brand's revenue.

"Having been part of the management team for a number of startups over the years -- Parenting, Martha Stewart Living, Vibe -- I understand the traditional model of increasing rate base to grow share of category ad dollars," Ms. Reilly said. "This isn't that. I don't think any magazines will launch that way again."

THE ATLANTIC

The Atlantic still isn't making a profit, but it projects that its annual loss will shrink 42% to 45% this year despite the recession. "It's going to be the best financial performance in a decade," said Justin Smith, president of Atlantic Consumer Media.

The magazine, which guarantees advertisers paid circulation of 450,000, remains the core. But much of The Atlantic's strategy revolves around diversifying its revenue streams and activity.

It changed its approach to events a couple of years ago, for example, making them paid events instead of extra value for marketers that bought lots of ad pages. It's also trying to shift some of the revenue burden to readers, which provide a more reliable revenue stream than advertisers do.

But its diversified activity, including a joint venture with the Aspen Institute to host the annual Aspen Ideas Festival, actually helps bring in advertisers. "Major marketers are looking to surround their target audiences across different media," Mr. Smith said. "If you have that capability, you can compete more effectively." More than half The Atlantic's ad revenue and perhaps two-thirds of its event revenue, as a result, are tied up in integrated programs.

COMPLEX

Complex has serious digital revenue, thanks in part to a network of primarily partner sites, from Nice Kicks to Nah Right, that it assembled in August 2007. "We're trying to say we are the most relevant brand for cool young men," said Rich Antoniello, CEO-publisher of Complex Media. "We had no choice. But we embraced it, rather than the way other print vehicles were fighting it."

Print advertising in the magazine, with paid circulation averaging 345,000, is down 10% to 15% this year, Mr. Antoniello said. But digital is growing at a double-digit clip. "That's why we've been able to continue to grow as a media brand overall. Digital growth has been so explosive that it's more than covered the print losses."

"As a network I can give you the height of authenticity, of credibility, with a group of these sites that are smaller," Mr. Antoniello added. "In aggregate and in totality, I'm going to be able to give you very targeted mass reach. All the other people that are just trying to grow their one site are really not thinking about their end users. They're thinking about their advertisers."

FADER

"Print has taken a massive nosedive this year, and online and events are both up big," said Andy Cohn, exec VP-group publisher at Fader Media. "Print is still the big brother in the scheme of things, but the little brothers and sisters are growing up around it."

Fader will probably turn a small profit even in this recession year, Mr. Cohn said, on the strength of those growth areas and militant cost cutting. The magazine, which guarantees paid circulation of 95,000, is publishing seven issues this year, on its way to a regular bimonthly schedule next year.

"I don't think print is ever going to return to pre-recession levels," Mr. Cohn said. "The amount of nontraditional marketing opportunities now are just going to take the top off. There are so many more channels now that advertisers are comfortable going to."